The Times-Picayune – Seven years after streetcars returned to Canal Street following a four-decade absence, New Orleans officials staged a ceremonial groundbreaking Tuesday for a 1.5-mile line along Loyola Avenue — the first of what they hope will be multiple new rail projects.

Construction on the federally financed streetcar line that will connect the Union Passenger Terminal to Canal Street is not expected to begin until July.

But based on encouraging words from an Obama administration Cabinet member, local transit executives have reason to believe that cash for more streetcar service could be in the offing.

“There’s not a lot of money in Washington,” Transportation Secretary Ray LaHood told a crowd huddled beneath a tent outside the passenger terminal.

“So when we give money, we give it to those organizations that have great leadership,” he added, offering kudos to the Regional Transit Authority. “And I have no doubt we’ll be back here again with more announcements … on other opportunities.”

During his remarks, LaHood also announced that the administration has awarded the RTA a $400,000 grant to establish a streetcar maintenance training program designed to create new jobs for skilled workers.

The RTA beat the odds to secure federal dollars for the Loyola line from a $1.5 billion component of the Obama administration’s stimulus package.

The local application was one of 1,400 from all 50 states. Of the 30 cities that sought money for rail projects, New Orleans was one of just three to be chosen, along with Dallas and Tucson, Ariz.

RTA staffers have recommended Archer Western Contractors of Arlington, Texas, which submitted the lowest of six bids, for the $34.5 million contract to build the Loyola line.

If, as expected, the RTA board approves the bid selection, officials said work will commence next month. Plans call for the line to open for service about a year later.

The Loyola Avenue tracks will run in the street on both sides of the neutral ground. Plans include four covered streetcar stops at Tulane Avenue, Poydras Street, Julia Street and the Union Passenger Terminal.

The Loyola Avenue route will use surplus streetcars from the Canal Street and Riverfront lines. After floodwaters from Hurricane Katrina destroyed the 24 candy-apple red Canal streetcars and the six Riverfront streetcars, the RTA used $31.5 million in FEMA reimbursements to restore them.

LaHood made it clear Tuesday that the Obama administration is bullish on light rail, particularly New Orleans’ vision for expanded service as an impetus for economic development.

“Streetcars are coming back to America,” LaHood said.

“You know, back in the old days, a lot of communities had streetcars. And then they paved over the tracks. Now, there’s a lot of communities that want to get back into the streetcar business.”

He said when visitors see New Orleans’ streetcar network, “they want that same magnificent system in their own communities.

“Again, New Orleans has been the leader in this, and we’re delighted to make the kind of investments were making.”

As the RTA prepares to launch the downtown project, the agency is moving ahead with plans to bring streetcar service to FaubourgMarigny, Treme and St. Roch via the North Rampart Street and St. Claude Avenue corridor.

Last month, the RTA board authorized solicitation for final design bids for the so-called French Quarter loop, which will travel along North Rampart and then St. Claude between Canal Street and Press Street.

A 1.2-mile spur on Elysian Fields Avenue that would connect with the Riverfront line at Esplanade Avenue has been put on the back burner, while officials look into the prospects of extending the line to Poland Avenue in the Upper 9th Ward.

That addition would call for streetcar tracks to cross the railroad tracks at ground level at the intersection of St. Claude and Press Street. Norfolk Southern Railway, which has final say in the matter, opposes the approach, citing safety concerns.

With more than $90 million in hand to build the project, RTA executives are optimistic they can begin the first phase late next year or early in 2013.

Plans for a third new streetcar line along Convention Center Boulevard have been shelved for now while the St. Claude proposal moves forward.